What are Scope 2 emissions?
Companies face the challenge of accurately recording their CO2 emissions in order to meet regulatory requirements and the expectations of their stakeholders. Scope 2 emissions are a key element of this. But what exactly does this term mean?
In this article, we explain the meaning of Scope 2 emissions and show you how you can easily record the scopes.
What are scopes? An introduction to the basics
The term "scopes" appears in connection with the environmental management of companies, more precisely in the calculation of thecarbon footprint. Scopes refer to three categories of greenhouse gas emissions caused by an organization. By calculating theirCO2 emissions, companies reveal their emissions and divide them into scopes 1, 2 and 3. On this basis, companies can then define measures to reduce their emissions and report them systematically.
The origin of the Scopes dates back to 2001, when the Greenhouse Gas Protocol (GHG) created an international standard for emissions reporting. Prior to the introduction of the GHG Protocol, there was no generally accepted method by which companies could quantify their contribution to climate change. The clear division into Scopes 1, Scope 2 and Scope 3 enables companies to present a structured and comparable method for calculating and reporting their carbon footprint . In addition, the GHG Protocol and the scopes are the first uniform standard that is recognized by both companies and environmental organizations.
What are Scope 2 emissions?
Scope 2 emissions include indirect greenhouse gas emissions. These arise when a company consumes energy in the form of
- Electricity
- Steam
- Heat
- Cooling
that was generated outside the company's own organization . Scope 2 emissions are therefore of crucial importance for companies that want to calculate and understand their carbon footprint.
How do Scope 2 emissions differ from the other scopes?
In contrast to Scope 2 emissions, the Scope 1 emissions direct emissions from sources owned or controlled by the company . This includes emissions from operational facilities and vehicles. When a company wants to calculate its carbon footprint, it typically starts with these directly attributable emissions. The calculation of the CO₂ footprint for Scope 1 refers to gases that are produced directly by the combustion of fuels in the company's facilities or by company-owned vehicles - for example, emissions from the use of a company fleet or the operation of machines and air conditioning systems in companies.
Scope 3 emissions represent all indirect emissions that occur along the company's entire value chain but are not directly owned or controlled by the company. This category is often the most comprehensive and diverse, as it includes both upstream emissions from the production of the products or services purchased and downstream emissions resulting from the use and disposal of the products sold by consumers. In the CO₂ calculation, Scope 3 emissions are often considered the most complex part, as they require a detailed analysis of the entire supply chain.
How do Scope 2 emissions vary by business sector?
Electricity is the main source of Scope 2 emissions for many companies. These emissions are basically divided into two categories:
- On the one hand, there is the electricity used directly by the end consumer, which falls under Scope 2 emissions.
- On the other hand, there are so-called "T&D losses" (transmission and distribution losses), which are caused by energy transmission and distribution by the supply companies and are classified under Scope 3.
A company's Scope 2 emissions are determined by the sources of the electricity it purchases. If a company relies heavily on electricity from fossil fuels, the Scope 2 emissions are generally higher than for an energy mix based on renewable energies, biomass or natural gas.
The Greenhouse Gas Protocol provides detailed guidance on how to deal with Scope 2 emissions and draws attention to the fact that in some cases - such as leased premises - the allocation of emissions from purchased energy is not always clear. Here it is important for companies to understand the nature of the tenancy and adopt an approach to calculating the carbon footprint that is consistent with the GHG Protocol guidelines for the leased space. As part of the tenancy, the proportionate electricity, steam, heating and cooling capacity used by the renting company is integrated into the balance sheet.
Scope 2 emissions: Why they are important
Companies that record, analyze and reduce their emissions data ensure the long-term success of a company. On the one hand, companies comply with reporting obligations such as the Corporate Sustainability Reporting Directive (CSRD) by calculating CO₂ and recording the associated scope. They also optimize operating processes, increase competitiveness and minimize costs and risks. Companies that act sustainably also meet the demands of internal and external stakeholders and score points as an attractive employer or in employer branding.
How are Scope 2 emissions measured?
The company's energy consumption and specific emission factors are used to measure Scope 2 emissions. These factors indicate how much CO₂ is emitted during the production of a unit of energy.
The Greenhouse Gas Protocol, which provides guidelines for recording Scope 1, 2 and 3 emissions, is often used to calculate a company's CO₂ emissions. ISO 14064 provides standards for quantifying and reporting these emissions. Tools such as CO₂ footprint calculators help companies to accurately calculate their Scope 2 emissions.
Effectivemeasures to reduce Scope 2 emissions
Companies can take the following measures to reduce Scope 2 emissions:
- Energy transition: Switch to renewable energy sources such as wind, solar or hydroelectric power in order to minimize the consumption of fossil fuels.
- Energy efficiency: Investment in energy-efficient technologies and equipment, including efficient air conditioning systems for companies, lighting and heating systems, in order to reduce overall energy consumption.
- Green electricity contracts: Conclusion of green electricity contracts or Power Purchase Agreements (PPAs), which ensure that the electricity purchased comes from sustainable sources.
How you can easily record Scope 2 emissions
There are specialized software solutions for recording, analysing and managing the scopes that help to automate the CO₂ calculation. These tools also make it easier to comply with reporting standards such as CSRD or ISO 14064.
With Planted, we offer your company a holistic software solution that allows you to take action, from TÜV-certified CO₂ balancingto targetedCO2 management and CSRD-compliant reporting. Would you like to get to know our solution without obligation? Book your free demo today.
